logo logo

A sign of greater openness

Straits Times, Singapore

A sign of greater openness

By Chua Chin Hon

22 October 2008

BEIJING - The landmark free trade agreement (FTA) to be inked betweeen Singapore and China on Thursday is a sign of Beijing’s commitment to greater openness with its partners despite the current difficulties in global trade talks, said Prime Minister Lee Hsien Loong.

Mr Lee, who arrived in Beijing on Wednesday to begin an official five-day visit, said in an interview with the mainland media ahead of his trip that the agreement had ’broader implications’ and signalled where Beijing was headed with its trade policies.

’For China, it is a signal that despite the difficulties in the Doha Round, China still wishes to push forward with promoting trade and openness with its partners,’ said the prime minister, according to a transcript of the interview released to the Singapore media on Wednesday.

The Doha Round refers to the current round of the World Trade Organisation negotiations, which aims to lower global trade barriers. Though negotiations began in November 2001, progress remains stalled by disagreement over a range of issues such as agricultural subsidies and industrial tariffs.

PM Lee also expressed the hope that the China-Singapore FTA would spur other Southeast Asian countries to further develop their links with China, as well as for Asean as a whole to complete its FTA with China.

China and Asean aim to wrap up their FTA negotiations by 2010, a move that would, on paper, create a zero-tariff market of 1.7 billion people.

’When you complete a free trade agreement, there’s always an element of caution as to whether you are ready to open up,’ said Mr Lee. ’But if other countries can do it, then there’s more incentive for Asean as a whole to go ahead and do the same. So, I think it is a good signal.’

The Prime Minister will witness the signing of the China-Singapore FTA in Beijing on Thursday, as well as attend a series of back-to-back meetings with the top Chinese leadership, including President Hu Jintao, Premier Wen Jiabao, legislative chief Wu Bangguo, and vice premier Li Keqiang.

Mr Lee is also scheduled to meet Asian and European leaders in town for the Seventh Asia-Europe Meeting (Asem), which opens on Friday. The two-day meeting is expected to be dominated by the current financial crisis that has been roiling stock markets worldwide.

The Prime Minister said he expected the 45-member cross continent summit to discuss measures that individual countries and regions can take in response to the crisis.

’There is a need for coordination to know what others are doing; to understand each other’s thinking; and to make sure that what each country does doesn’t make the problems more complicated for other countries,’’ he added.

Asked what the Asian economies should do in the face of a global slowdown, Mr Lee said the best option for the moment was to ’keep our economies moving’ by increasing investment where appropriate, and encourage domestic consumption as a way to buffer against the slide in exports to the developed markets.

But such economic restructuring, particularly in China, could take time. ’For now, we must expect a slowdown and I think we can withstand it,’ he added.